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Hello and thank you for your time looking this over. I think I may be way off on this. First house run through the Calc and I am totally learning. I know this needs pictures, inside walk through to really get anywhere. I dont have access to inside and just wanted to rough this in to see how bad or good this deal might be before diving in deeper.
This house looks straight and solid with several additions but exterior it looks good (design) needs full exterior paint and finish and noticed extreme little physical repair. main house 2600' garage and adu 500' and additional 250' storage building.
neighbors have been in the house and kept it secure from homeless and drugs. they say it is not torn out but the old lady never updated anything. (old widow house past away) this may be a nob and tube house in my area that is not grounded. our neighborhood age and my guess on this house I would plan a remodel that allowed me new plumbing and electrical. (my house ran me $15,000 for this) Roofs are 3 tab I estimate 25% life left maybe 8-10 years if maintained. house needs a couple windows.
Yard- full over grown but clean out black berries and restore lawn. (basic)
Thanks for being willing to show me my faults in this. Tax value is correct but pretty much most of the figures are really free hand based on all that Brandon Turner post cast education. ( Tarl Yarber ?)
@Robert McAleer everyone gets this wrong. Pre rehab you have 3 months of rehab and then your are renting for an additional 3 months to season. 3/6 = 50% vacancy. I would half my capex and repair budget or eliminate it on the pre. There is a cap ex spreadsheet in the files section of BP that will let you know if you have enough budgeted. You said the roof has a lifespan of 8-10 years so unless you are willing to pay out of pocket this has to be budgeted. Made up numbers roof $7500 / 10 years /12 months = $62.50 per month capex. Another example flooring main house 2600 sf @ $5 per sf = $13000 / 8 year life span / 12 months = $135 per month.
Thank you. Will that 50% then continue for the rest of the loan or only up to the refi time? Do you see a deal ironing out in this?
Made that change but really changed the numbers and it takes the 50% over the entire 30 years. Maybe I'll find a way to do just the 6 month period or do the math to get a combined rate for the total period of the 30 year loan and try again.
@Robert McAleer post rehab use the prevailing vacancy rate. I use 8% which equates to 1 month vacant out of 12. On a BRRR there is always 2 different time periods Pre and Post rehab and they have different numbers. For pre vacancy 50%,0 repairs, 0 capex, 5% rental. Download the spreadsheet and calculate what you need for capex. For a rough analysis I use 23% for vacancy,repairs and capex divided the way you want. I use 10% minimum for property management. So your post rehab numbers will be around 48%. you have several exit strategies you can sell it after rehab. You will make almost $200000 profit. Not bad for 3 months of work providing you estimated the ARV correctly. Your 2% return on 0 money out of pocket is infinite. Only you can make the decision on your goals. Food for thought a 3% raise on rents per year. Your $80 becomes $200 per month year 2 and grows each year after.